Cash transfers might not be the best way to meet India’s welfare aims

livemint.com:

In the recent state elections, incumbent governments in all except Madhya Pradesh lost. There are many factors that influence the electorate’s voting behaviour, with economic performance being important but not the sole one. So, drawing any conclusion on the relative performance of states based on election results is unlikely to yield fair conclusions.

However, there are some common threads from the way the campaigns were conducted that could be a precursor of things to come in India’s general elections of 2024. The issues of jobs, price rise and general distress were raised by the opposition and to a certain extent may have resonated with the electorate, but these were certainly not the main ones. The campaigns were largely centred around various benefits promised by the main political parties.

Despite the Prime Minister slamming a ‘revdi’ (or freebie) culture in an October 2022 speech, most parties were not shy of offering these in different forms to various groups. In some ways, there is now a consensus that direct cash transfers are as much a part of policy as the usual themes of growth, employment and redistribution. Each party is competing with the other on the quantum of benefit but not on the principle of cash transfers.

This has led to an expansion of benefits by way of free bus tickets to women, revival of the old pension scheme for government employees, and cash transfers to unemployed youth, apart from subsidies on cooking gas, housing, etc, and also cash transfers for marriages, births and so on. Contrast this with the debate before the enactment of the National Rural Employment Guarantee Act (NREGA) or National Food Security Act (NFSA). Even though there was general consensus on their desirability, their